Why we no longer fix petrol price, by PPPRA

* Guiding price band aimed at protecting consumers against price gouging ─Executive Secretary

* IPMAN urges members to comply with new petrol price

Emmanuel Akosile | ConsumerConnect

The Petroleum Products Pricing Regulatory Agency (PPPRA) has said that it does not fix the pump price of petrol also known as Premium Motor Spirit (PMS) for fuel marketers any longer.

Mr. Saidu Abdulkadir, Executive Secretary of PPPRA, who in a statement in Abuja, FCT, Sunday, June 28, said this, however, disclosed that the agency would, on a monthly basis, frequently develop “a guiding price” for the commodity, advising the marketers.

The deregulation of the downstream sector is dependent on the enforcement of appropriate laws by strong regulatory agencies, hence its continued intervention, according to Abdulkadir.

The PPPRA Executive Secretary stated: “For the purpose of emphasis, let me reiterate that different sectors of the polity operate under the guidance of national regulators.

“The Central Bank of Nigeria (CBN) regulates the banks and the financial sector; Nigerian Communications Commission (NCC) regulates telecommunications; National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.

“To this end, it is not out of place for the Agency to provide a guiding price band with the aim to protect consumers against price gouging.”

He explained that there is nowhere in the world that deregulation means total lack of control, supervision or oversight.

He said: “While the Market-Based Pricing Regime is a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry.”

The PPPRA no longer fix prices, but rather provide a guiding price band by monitoring petroleum products prices daily, Abdulkadir emphasised.

This, he said was being done using the average price of the previous month to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns to Oil Marketing Companies (OMCs).

“This methodology is in line with international best practices which range from bi-monthly to monthly price reviews.

“Nigeria adopted the monthly review model considering the average duration for the importation of petroleum products into Nigeria from the closest spot market; North West Europe (NWE) to West Africa (WAF) is about 30 days.

“This period encompasses the Import Financing Process to delivery at retail outlets,” he added

According to him, the new pricing regime would encourage oil marketers to resume supply of PMS, leading to further value creation in the downstream; foster job creation and ensure reasonable returns for investors, besides creating healthy competition among marketers and extra funding for other important infrastructure.

He said that the PPPRA would continue to regulate the downstream petroleum industry, irrespective of the deregulation of the sector.

This pricing guide regime would also prevent petroleum products marketers from exploiting consumers, and help to enforce the appropriate laws guiding the industry, he added.

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